2181 - Chapter 5 - Key terms

2181 - Chapter 5 - Key terms

Assessment

Flashcard

Social Studies

University

Hard

Created by

Phuong Vu

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21 questions

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1.

FLASHCARD QUESTION

Front

effective annual rate (EAR)

Back

Interest rate annualized using compound rather than simple interest.

2.

FLASHCARD QUESTION

Front

annual percentage rate (APR)

Back

Interest rate is annualized using simple rather than compound interest.

3.

FLASHCARD QUESTION

Front

nominal interest rate

Back

The interest rate in terms of dollars that have not been adjusted for purchasing power.

4.

FLASHCARD QUESTION

Front

real interest rate

Back

The excess of the interest rate over the inflation rate. The growth rate of purchasing power derived from an investment.

5.

FLASHCARD QUESTION

Front

dividend yield

Back

The percent rate of return provided by a stock’s dividend payments.

6.

FLASHCARD QUESTION

Front

mean return

Back

Another term for expected return.

7.

FLASHCARD QUESTION

Front

variance

Back

A measure of the dispersion of a random variable. Equals the expected value of the squared deviation from the mean.

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